NRC Group ASA uses debt and equity to ensure long-term financial stability in the Group. Financing is intended to ensure predictable financial frameworks for operations and provide shareholders with returns in line with our dividend policy. The Group's capital structure considers the necessary financial flexibility to implement strategic plans, manage existing debt financing arrangements, as well as working capital needs and provide necessary funds for dividend payments. The long-term ambition is to have a leverage ratio of less than 2.5x.
The Group manages its capital structure and makes changes based on an ongoing assessment of the current economic conditions and prospects both in the short and medium term. Capital management is monitored based on available liquidity and net interest-bearing debt, as well as the Group's leverage ratio, interest coverage ratio and equity ratio.
| NOK | EUR | SEK | |
|---|---|---|---|
| Bond loan | 3-month NIBOR* + 4.40% | ||
| Term loan | 3-month EURIBOR + 2.30%** | ||
| Credit facility | 3-month NIBOR + 1.60% | 3-month EURIOR + 1.60% | 3-month STIBOR + 1.60% |
**The margin is based on the Group’s leverage ratio. See margin grid below:
> 3.25x = 2.75%
≤ 3.25x and > 2.25x = 2.30%
≤ 2.25x and > 1.25x = 2.10%
≤
1.25x = 1.95%
NRC Group has established a Green Financing Framework, as part of the commitment to develop and supply services to build sustainable transport solutions.
The framework has been developed to align with the 2021 ICMA Green Bond Principles (including the updated Appendix I from June 2022) and the 2023 LMA, LSTA, APLMA Green Loan Principles.
The framework sets out the criteria for investments that can be financed or refinanced with green bonds, green loans other green debt instruments, and will be applied to NRC Group’ s investments that promote clean transportation projects. It covers investments and operating expenses related to infrastructure for rail transport, infrastructure enabling low carbon public transport, as well as investments in renewable biogas fuels and electrification of light and heavy vehicles and construction machines.
S&P Global Ratings has conducted an independent external assessment of the framework and has given it their highest rating, dark green, with a governance score of ‘Good’. Danske Bank acted as green structuring advisor in the development of the framework.
Based on the Green Finance Framework, the Group has issued a 4-year senior unsecured green bond with an initial issue amount of NOK 400 million. The bond carries an interest rate of 3 months NIBOR* plus a margin of 4.40%. The bond has been listed on the Oslo Stock Exchange under the name NRC02 ESG. The proceeds from the green bond has been used in accordance with the green project categories as described in the Green Finance Framework. The Group has issued a Green Finance Report for 2023 describing the allocation of proceeds and the environmental impact of the green projects.
*The Group has hedged the 3 months NIBOR to a fixed rate of 3,843% for the full period
| Bonds terms | NRC02 |
|---|---|
| ISIN | ISIN NO0013049403 |
| Ticker | NRC02 ESG |
| Security type | Senior unsecured open callable green bond |
| Currency | NOK |
| Face value | 400,000,000 |
| Coupon | 3 months NIBOR plus 4.40% p.a |
| Issue date | 25 October 2023 |
| Maturity | 4 years (25 October 2027) |
The Group has a term loan facility with Danske Bank of EUR 22 million (as per Q3 2023). The term loan has quarterly installments of EUR 1,2 million until maturity in July 2027.
The Group has a multi-currency overdraft facility of NOK 400 million in Danske Bank. The overdraft facility is subject to annual renewal.
The loan facilities are secured by pledge over shares in subsidiaries amounting to NOK 2,000 million, receivables, inventory and operating equipment amounting to NOK 500 million and intra-group loans of NOK 2,000 million.
The Group’s term loan and the NOK 400 million senior unsecured green bond contain certain financial conditions based on the facility agreements that may not be directly related to reported IFRS numbers:
• Interest coverage ratio: 12 months rolling EBITDA adjusted for acquisition costs and certain non-recurring items in relation to relevant financial net payments.
• Leverage ratio: Net interest-bearing debt in relation to adjusted 12 months rolling EBITDA
• Equity ratio: Equity in relation to total assets
| Covenants | Term loan (Danske Bank) |
|---|---|
| Interest cover ratio | ≥ 3.00x |
| Leverage ratio | ≤ 3.75x* |
| Equity ratio | > 25% |
| Covenant | Overdraft facility (Danske Bank) |
|---|---|
| Borrowing base | ≤ 60% of accounts receivables |
| Covenants | Bond loan |
|---|---|
| Interest coverage ratio | ≥ 2.50x |
| Leverage ratio | NA |
| Equity ratio | > 25% |
EBITDA: Operating profit plus depreciations on fixed assets and right-to-use assets, plus amortisations on intangible assets, including intangible assets such as customer relations and order backlog accounted for as part of the purchase price allocation under business combinations and IT software investments.
Equity ratio: Total equity in relation to total assets.
Interest cover ratio (related to term loan agreement)): 12 months rolling EBITDA (adjusted for acquisition costs and certain non-recurring items) divided by the 12 months rolling net financial expenses excluding interest expenses related to the bond loan.
Interest coverage ratio (related to bond loan agreement): 12 months rolling EBITDA (adjusted for acquisition costs and certain non-recurring items) divided by the 12 months rolling net financial expenses.
Leverage ratio: Net interest-bearing debt divided by 12 months rolling EBITDA (adjusted for acquisition costs and certain non-recurring items).
Net interest-bearing debt: Interest-bearing liabilities minus cash and cash equivalents.